Mortgage applications tick up 0.9%

Refinancing share increases

Reversing a month-long trend, mortgage applications increased 0.9% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending December 19, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4% compared with the previous week. The Refinance Index increased 1% from the previous week. The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 1% lower than the same week one year ago.

The refinance share of mortgage activity increased to 67% of total applications from 66% the previous week. The adjustable-rate mortgage share of activity increased to 6.5% of total applications.

Sponsor Content

The FHA share of total applications decreased to 8.6% this week from 8.7% last week. The VA share of total applications decreased to 10.3% this week from 10.6% last week. The USDA share of total applications remained unchanged at 0.8% this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.02%, the lowest level since May 2013, from 4.06%, with points increasing to 0.26 from 0.21 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.07% from 3.99%, with points decreasing to 0.23 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.86%, with points increasing to 0.00 from -0.04 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.29% from 3.33%, with points increasing to 0.29 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.10% from 3.00%, with points decreasing to 0.31 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

Commentary

With the recent turnover in leadership at the Federal Housing Finance Agency, we may be standing at the precipice of great change in the government’s role in supporting the mortgage market through Fannie Mae and Freddie Mac.